Green Initiative : Introduction of Framework April 2011 Jiseok Kim APEC SME Innovation Center

Timeline (tentative) April 20 - To present the “Green Initiative” framework By mid-May - Disseminate draft report to member economies and collect opinions May 20 – 21 The 18th APEC SME Ministerial Meeting - Submit the Green Initiative Framework and timeline for approval June – July - “Green policy” develop Green Action Plans (GAPs) and best practice reports. By August - Korea to collect GAPs of member economies and draw up a combined report By mid-Sept. - Present GAPs at the Green Initiative Workshop

Green Transition & SMEs SMEs are major employers and key economic players in all economies SMEs are major employers and key economic players in all economies Green transition is a must Green transition is a must However current market environment is not friendly to greener SMEs However current market environment is not friendly to greener SMEs Therefore green transition require government intervention and support Therefore green transition require government intervention and support SMEs need stronger intervention and support for successful green transition SMEs need stronger intervention and support for successful green transition

Green Initiative: Areas and Elements AreasElements A. Definition and green SME development roadmap 1 – 2 B. Financial and non-financial support for green technology innovation and green management by SMEs 3 – 7 C. Fostering a green-friendly economic environment including creating demand for green technology & awareness raising 8 – 11 D. Creating green partnerships 12 – 16

1. Defining “Green” Why? Why? No formal definition of “green technology”, “green product” No formal definition of “green technology”, “green product” May mean May mean Low-carbon Low-carbon Environmentally friendly (less pollution) Environmentally friendly (less pollution) Sustainable growth Sustainable growth Need to see different views of “green” in APEC economies Need to see different views of “green” in APEC economies Guidelines & benchmarks further clarifying “green” can be useful Guidelines & benchmarks further clarifying “green” can be useful What should be reported? What should be reported? Definition of “green” (legal or informal) Definition of “green” (legal or informal) “Green” or comparable term “Green” or comparable term Is the definition made legally? How? Is the definition made legally? How? Is there an easy to understand guide or benchmarks which explain and clarify what “green” is? Is there an easy to understand guide or benchmarks which explain and clarify what “green” is?

2. Green Transition Roadmap for SMEs Why? Why? Long-term transition (2050 and beyond), need guidance Long-term transition (2050 and beyond), need guidance Not wholly market driven – government-led Not wholly market driven – government-led Need for a defined objective Need for a defined objective SMEs have resource for long-term planning SMEs have resource for long-term planning What should be reported? What should be reported? Existence of national green transition roadmap Existence of national green transition roadmap Existence of green SME development roadmap Existence of green SME development roadmap Green SME development plan objective Green SME development plan objective Communication of green SME roadmap Communication of green SME roadmap

3. Funding for Green Tech R&D Why? Why? Green transition require new greener technologies Green transition require new greener technologies Green technologies not necessarily focused on improved competitiveness in current business environment Green technologies not necessarily focused on improved competitiveness in current business environment Incentive for private investment is not strong Incentive for private investment is not strong Green tech can bring significant public benefits Green tech can bring significant public benefits Innovators often lack funding especially when they are green Innovators often lack funding especially when they are green What should be reported? What should be reported? Green R&D Grant Green R&D Grant Loan scheme for R&D institutes Loan scheme for R&D institutes Tax Incentive for green innovators Tax Incentive for green innovators

4. Green Start-up Assistance Why? Why? Green tech only useful when made market-ready Green tech only useful when made market-ready Start-up companies often lack business skills Start-up companies often lack business skills Extra challenging to attract assistance Extra challenging to attract assistance Need general business support as well as more specialized support Need general business support as well as more specialized support What should be reported? What should be reported? Provision of business consultation service Provision of business consultation service Green venture incubation agency Green venture incubation agency Green mentoring service Green mentoring service

5. Greening the workforce Why? Why? Green transition requires workforce with green skills, mindset and motivation Green transition requires workforce with green skills, mindset and motivation Employee participation and innovation is key to success Employee participation and innovation is key to success Green skills not yet marketable in many member economies Green skills not yet marketable in many member economies Trade union / employee union must be prepared for green transition otherwise they will resist/suffer Trade union / employee union must be prepared for green transition otherwise they will resist/suffer What should be reported? What should be reported? Green skills training Green skills training Education for better understanding of environmental issues Education for better understanding of environmental issues Program for fostering green motivation Program for fostering green motivation

6. Supporting Green Renovation Why? Why? Greener operation of conventional business can bring much benefit Greener operation of conventional business can bring much benefit Many commercially-viable green technologies / management techniques yet to be employed Many commercially-viable green technologies / management techniques yet to be employed Barriers to greater uptake of green technologies exist, which can be and should be removed Barriers to greater uptake of green technologies exist, which can be and should be removed What should be reported? What should be reported? Loan scheme for purchasing of green equipment and facilities Loan scheme for purchasing of green equipment and facilities SME Outreach and green potential assessment service SME Outreach and green potential assessment service List of top green technologies List of top green technologies

7. Intellectual Property Rights Support Why? Why? IPR is crucial incentive for green technology development IPR is crucial incentive for green technology development Green SMEs often need assistance to understand and navigate IPR systems (domestic and foreign) Green SMEs often need assistance to understand and navigate IPR systems (domestic and foreign) To patent new green technologies To patent new green technologies To license the use of green technologies To license the use of green technologies Strong IPR systems may not be enough for green growth Strong IPR systems may not be enough for green growth Transfer mechanism for innovative ideas and green technologies needed Transfer mechanism for innovative ideas and green technologies needed What should be reported? What should be reported? IPR protection support for technologies developed by Green SMEs IPR protection support for technologies developed by Green SMEs IPR licensing support for use of IPR protected green technologies developed by others IPR licensing support for use of IPR protected green technologies developed by others

8. Green Government Procurement Why? Why? Importance of green government procurement Importance of green government procurement Government is a major consumer Government is a major consumer Government procurement can provide steady market and reduce risks for entrepreneurs Government procurement can provide steady market and reduce risks for entrepreneurs Demonstration effect Demonstration effect Comprehensive green procurement policy plans and clear targets lead to better performance Comprehensive green procurement policy plans and clear targets lead to better performance Concentrate on value over product lifetime rather than current price Concentrate on value over product lifetime rather than current price What should be reported? What should be reported? Green procurement targets from green SMEs Green procurement targets from green SMEs Obligation to purchase products from green SMEs Obligation to purchase products from green SMEs Technical specifications as part of tendering qualifications Technical specifications as part of tendering qualifications

9. Regulatory and Subsidy Reform Why? Why? Regulatory reform required for effective green growth Regulatory reform required for effective green growth Eliminate or revise regulations which hinder green growth Eliminate or revise regulations which hinder green growth Ensure technical standards and specifications do not hinder green innovations Ensure technical standards and specifications do not hinder green innovations Eliminate or revise subsidies and tax breaks which favor use of fossil fuels Eliminate or revise subsidies and tax breaks which favor use of fossil fuels What should be reported? What should be reported? Regulatory review mechanism which examines impact of new and/or existing regulations on SMEs and the environment Regulatory review mechanism which examines impact of new and/or existing regulations on SMEs and the environment Mechanisms to review existing laws and regulations which encourages the use of fossil fuels Mechanisms to review existing laws and regulations which encourages the use of fossil fuels

10. Improving Market Access for Green Tech. Why? Why? Help green SMEs and green products export and attract FDI Help green SMEs and green products export and attract FDI Information provision needed Information provision needed Consulting service Consulting service Reduce market barriers for foreign green products Reduce market barriers for foreign green products Reviewing tariffs Reviewing tariffs Reducing FDI restrictions for green industries Reducing FDI restrictions for green industries What should be reported? What should be reported? Supporting policies for exports of green SME products Supporting policies for exports of green SME products Supporting policies for helping green SMEs attracting FDI or make investment abroad Supporting policies for helping green SMEs attracting FDI or make investment abroad Review of domestic laws and regulations for discriminations against foreign green technologies or products (ex. Tariff) Review of domestic laws and regulations for discriminations against foreign green technologies or products (ex. Tariff)

11. Cultivating Green Consumers Why? Why? Green businesses face great risk if consumers are not green Green businesses face great risk if consumers are not green Consumers needs to understand how green goods and services can benefit them in long run Consumers needs to understand how green goods and services can benefit them in long run Consumer with high green awareness can be most potent driving force to a green transition Consumer with high green awareness can be most potent driving force to a green transition What should be reported? What should be reported? National campaign program National campaign program Environmental label scheme Environmental label scheme Restriction on advertisement Restriction on advertisement Green consumption in national curriculum Green consumption in national curriculum

12. Green partnership with large companies Why? Why? Government alone cannot provide tailored support for SMEs – too many, difficult to reach out Government alone cannot provide tailored support for SMEs – too many, difficult to reach out Large companies have capacity, network and incentive to work with their SME suppliers Large companies have capacity, network and incentive to work with their SME suppliers Proven to be effective Proven to be effective What should be reported? What should be reported? Assessment of current situation and target Assessment of current situation and target Funding for partnership programs Funding for partnership programs Other support measures Other support measures Measures for sustainability Measures for sustainability

13. Partnerships with Research Institutions Why? Why? Universities and Research Institutions are sources of Green technologies Universities and Research Institutions are sources of Green technologies SMEs can do joint research SMEs can do joint research SMEs can commercialize the technologies SMEs can commercialize the technologies Incentives for joint research and technology transfers can be useful for encouraging Green Innovation Incentives for joint research and technology transfers can be useful for encouraging Green Innovation Universities are capable of training existing and future entrepreneurs and workers of Green SMEs Universities are capable of training existing and future entrepreneurs and workers of Green SMEs What should be reported? What should be reported? Policies that encourage collaboration Policies that encourage collaboration Incentives for technology transfer or collaboration Incentives for technology transfer or collaboration Policies that encourage experts from universities and public research institutions to interact with Green SMEs Policies that encourage experts from universities and public research institutions to interact with Green SMEs

Why? Why? Encouraging partnerships among green SMEs Encouraging partnerships among green SMEs Share information; network externalities Share information; network externalities Establish green industry groups Establish green industry groups Communicate with government Communicate with government Encouraging partnerships between green and non-green SMEs Encouraging partnerships between green and non-green SMEs Make non-green SMEs customers of green SMEs Make non-green SMEs customers of green SMEs Turn non-green SMEs to green SMEs as well Turn non-green SMEs to green SMEs as well What should be reported? What should be reported? Government programs which encourage clustering of green businesses Government programs which encourage clustering of green businesses Government programs which encourage discussions between green and non-green SMEs Government programs which encourage discussions between green and non-green SMEs 14. Encouraging SME-SME Partnerships

15. Green partnership with Civil Society Why? Why? Civil society and businesses are not traditional partners Civil society and businesses are not traditional partners Civil society objectives is well aligned with businesses that are willing to go green Civil society objectives is well aligned with businesses that are willing to go green Civil society can be helpful ally to green SMEs and can also monitor/report progress made Civil society can be helpful ally to green SMEs and can also monitor/report progress made What should be reported? What should be reported? Assessment of current situation and target Assessment of current situation and target Funding for partnership programs Funding for partnership programs Other support measures Other support measures Feedback system Feedback system

16. International Partnerships Why? Why? Environmental damage and greenhouse gases know no borders Environmental damage and greenhouse gases know no borders Solutions require global cooperation Solutions require global cooperation APEC is a unique international forum where diversity of members makes it an ideal forum to discuss international green cooperation APEC is a unique international forum where diversity of members makes it an ideal forum to discuss international green cooperation Programs to share best practices and work out common solutions are crucial for green growth Programs to share best practices and work out common solutions are crucial for green growth What should be reported? What should be reported? Multilateral, international or regional programs encouraging the creation and development of green SMEs Multilateral, international or regional programs encouraging the creation and development of green SMEs Multilateral, international or regional programs encouraging trade of green SME products and investment in green SMEs Multilateral, international or regional programs encouraging trade of green SME products and investment in green SMEs Multilateral, international or regional programs which discuss definitions of "green" and "sustainability" Multilateral, international or regional programs which discuss definitions of "green" and "sustainability"

Thank You Please send questions and comments to Prof. Yang Junsok: Jiseok Kim: